9911796707
TMI Blog2022 (8) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of disallowance u/s14A of the Act r.w. Rule 8D(2)(ii). The assessee is directed to provide the necessary details/ documents to substantiate his case and not to seek unnecessary adjournment for early disposal of the case. Appeal of the assessee is allowed for statistical purposes. - ITA No.156/Bang/2022 - - - Dated:- 21-7-2022 - Smt. Beena Pillai, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Appellant : Shri K. Sheshadri, C.A For the Respondent : Shri Sankar Ganesh K., DR ORDER PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER: This appeal by the assessee is against the order of CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 18.3.2021 for the assessment year 2017-18 with the following grounds of appeal:- 1. The orders of the Hon ble National Faceless appeal Centre/CIT (Appeal)- 4,/ AO in so far as they are against the appellant are opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant s case. 2. The appellant denies itself to be assessed on a total income of Rs.29,89,35,760/- as against the returned income of Rs.29,23,79,900/- for the year under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital gains of Rs.1,51,19,291/- from debt mutual funds at special tax rates u/s 111A of the Act. Special tax rate of 15% as per section 111A of the Act is applicable only for equity oriented mutual funds. Therefore, this claim of assessee was disallowed by the AO and the income is taxed at normal rates. 2.2 Further, it was observed by the AO that assessee has investments in subsidiary company and tax free bonds amounting to Rs.17,48,05,000/-. There is current investments amounting to Rs.22,77,94,204/- spread across 10+ funds. During the year, the assessee has earned dividend income of Rs.98,87,744/- from the investments. Ld. AO made it clear that investment portfolio requires significant manpower to ensure consistent return. Assessee has claimed that its own funds were enough for the investment. But it is seen by the AO that the assessee has incurred finance cost of Rs.8,29,164/-. Details of computation of disallowance u/s 14A of the Act were sought from assessee. However, the company did not furnish the details. Hence, disallowance was computed by the AO using the investment values from balance sheet. 2.3 Further, assessee has claimed set off of short term capital lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions and carefully considered the same along with the order of the authorities below as well as the documents referred to and relied on before us during the course of the hearing. Ground No.1,8,9,10 is general in nature and does not require adjudication. 4.1 Ground No2. raised by the assessee is difference of assessed income on regular assessments and returned income declared by the assessee, which comes to Rs.65,55,860/. The difference is disallowance u/s 14A of Rs.44,82,700/- and disallowance claim of Set off of short term capital gain with brought forward short term capital loss of Rs.20,78,371/- and the rest amount of Rs.5,211/- how the assessee has taken it was not explained. On perusal of the CIT(A) order the assessee had raised the ground before him only to disallowance of sec. 14A of Rs.44,82,700/- and the same also been raised before us. Accordingly, we have to decide disallowance made by the AO u/s 14A of the Act. 4.2 Ground No.3,4,5 6 in all these grounds the sole issue involved in regard to disallowance made u/s 14A of the Act. In this regard we observe that the AO has made disallowance as per 8D(ii) of the Act by considering the 1% of the aver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the administrative and employee cost devoted to earn the exempt income. In appeal, the CIT(A) has confirmed the disallowance as there may not be any direct expense and that the assessee has not made any interest payments related to earning of exempted dividends and accordingly, the only way disallowance can be computed proportionately as per Rule 8D(2)(iii) of I.T.Rules. 12. Ld. AR before us submitted that the assessee has already added the sum of Rs.82,378/- in the computation of income with the (return of income) u/s.14A of the Act in respect of expenses incurred relating to its exempted income and Rule 8D is not applicable. Ld. AR further submitted that this issue has been decided by the Tribunal in ITA No.211/CTK/2016 along with other connected appeals, order dated ITA Nos.106 110/CTK/2018 CO No.30/CTK/2018 12 29.06.2018 for the assessment year 2013-2014. On the other hand, ld. DR relied on the order of AO. 13. We find that this issue has been decided by the Tribunal in assessee s own case for the assessment year 2010-2011 in ITA No.211/CTK/2016 along with other connected appeals, order dated 29.06.2018 for the assessment year 2013-2014, wherein the Tribunal relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 Taxman.com 415 (Delhi Trib.)(SB). None of the parties before us, however, have laid any details to examine as to which of the investments have yielded such income which did not form part of the total income. We, therefore, restore the matter back to the file of the Assessing Officer for calculating the disallowance u/s. 14A read with Rule 8D afresh, in the light of observations made in the body of this order above. Accordingly, ground No.4 is allowed for statistical purposes. In the present case also, none of the parties before us, have submitted any details to examine as to which of the investment yield such exempt income which did not form part of total income. We, therefore, restore the issue to the file of the AO for limited purpose i.e. for calculation of the disallowance u/s.14A r.w. Rule 8D(2)(iii) of the Rules, in the light of our conclusions recorded hereinabove. Thus, the issue is restored to the file of the AO for recomputation of disallowance u/s.14A of the Act r.w. Rule 8D(2)(iii) in terms of our directions given hereinabove and the appeal for assessment year 2015-16 is partly allowed for statistical purposes. 4.4 However, the case cited by us is before the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
